Heidi and Teresa are equal partners in the HT Partnership. The partners formed the partnership seven years ago by contributing cash. Prior to any distributions, the partners each have a $50,000 basis in their partnership interests. On December 31, the partnership makes a proportionate operating distribution to Teresa of $40,000 cash and stock with a fair value of $20,000 (inside basis of $7,000). What is the amount and character of Teresa's recognized gain or loss? What is Teresa's remaining basis in HT?
What will be an ideal response?
Teresa does not recognize any gain or loss on the distribution. She takes a basis of $40,000 in the cash and $7,000 in the stock. Teresa's remaining basis in HT is $3,000.
Teresa allocates $40,000 of her outside basis to the money received, then an additional $7,000 to the stock (transferred basis). These reductions leave a remaining basis in HT of $3,000 after the distribution.
You might also like to view...
Breaking all the conventional norms, Selfridge opened his department store just off Oxford Street. The changes incorporated include all of the following except:
A) perfume and fragrance were moved to the front in order to avoid any horse dung odors. B) goods were put within reach of the customers. C) goods were kept behind counters and were available by asking store clerks. D) customers always came first. E) early bird specials were offered.
For U. S. students who have traveled abroad, standards of cleanliness are a source of major cultural shock
Indicate whether the statement is true or false.
Carson Products Inc manufactures LEDs (light emitting diodes) for use in vehicles. On September 30, the company had 5,000 LED units in inventory. The company's policy is to maintain a LED ending inventory equal to 25% of next month's expected sales. In addition, each LED manufactured requires 2 minutes of assembly and inspecting time at a cost of $.30 per minute. The company expects the following
sales activity for the fourth quarter of the year: October 90,000 units November 100,000 units December 80,000 units What is the projected direct labor cost for November? A) $72,000 B) $63,000 C) $60,000 D) $57,000
A(n) ________ is a number that identifies a particular device.
A. NIP B. WSDL C. hyperlink D. IP address E. domain